Mortgages in Canada: Your Mortgage Document Checklist
Qualifying for a mortgage in Canada can feel like a daunting process, but it doesn’t have to be. When you create a mortgage document checklist, it’s much easier to gather all the required information before you start the application process. The end result gives you a smoother home buying experience.
We’ve covered each mortgage document below so you will know what to include in your checklist. Lenders will then be able to see your current financial situation including your credit history and can then help you get approved for the home you want.
With the hustle of gathering all of the usual paperwork required for the mortgage, it’s not unusual for people to forget about the application itself! Sometimes, you’re able to fill this out online and then bring the documents in person. However, most lenders have a paper form to fill out.
Talk with your mortgage lender to find out if you can fill out the application ahead of time to bring with you to your appointment, along with the other documents listed below.
Proof of Income
Lenders will need to verify the current income for all parties included in the application. This comes in the form of a letter of employment from your employer, as well as your Canada Revenue Agency Notice of Assessment (NOA) from your latest tax return. For those applicants who are self-employed, lenders require two years of NOAs.
Also, if you have worked for your current employer for less than two years, you may be required to present information about your previous employer and income.
Your income includes any wages from your primary employment, any part-time work you do, and outside sources of income such as alimony, child support, tax benefits, etc.
Don’t forget about your investments! Products such as Registered Retirement Savings Plans (RRSPs) or Tax-Free Savings Accounts (TFSAs) count toward your income which will help you in qualifying for your mortgage.
Be sure to bring all related paperwork pertaining to these items noted above.
Consent For a Credit History Search
In order to determine your credit rating, the mortgage lender will ask for permission to check your credit history. This will usually involve signing a form authorizing them to access your records. This helps the lender ensure you’re not a risk to lend to.
Sometimes you can fill out this form ahead of time. If not, your lender will have it ready for you at your appointment.
Proof of Down Payment
All mortgage lenders require a minimum of five percent down payment on your total purchase price. The law requires proof of the origin of these funds to prevent fraud, and lenders require proof to ensure this investment is coming from your own sources.
This could include such documents as bank statements showing the available funds, a gift letter from relatives if you are receiving funds from them to assist in your down payment, or the paperwork relating to a bridge loan or Home Equity Line of Credit.
If you’re taking advantage of some of the Government of Canada’s available down payment assistance programs, such as the First Time RRSP Home Buyer’s Plan, or the Home Buyer’s Plan, be sure to bring the related paperwork for these programs.
Property Details For Your New Home
If you’re applying for a mortgage pre-approval, this information is not required as you haven’t yet chosen the home you’re purchasing. However, if you are applying for a full mortgage, the property details to which the mortgage will be applied need to be provided to the lender.
Lenders will need a copy of your purchase agreement, real estate listing (if applicable), information pertaining to the property taxes and estimated heating costs, and condo fees (if applicable). They will also require your lawyer’s full contact information.
Property Details For Your Previous Home
This won’t apply if you’re purchasing your first home, but if you’re also selling your previous home you may be required to provide some documents about the house you’re selling, such as…
- Property Tax Bills/Statements
- Recent Mortgage Statements
- Details on Your Home Insurance
- A Legal Description Of Your Property
The amount owing on your current mortgage, and other debts (such as a HELOC) can affect the application for your new mortgage, so it’s important to have all this information to hand right from the start.
Not all mortgage lenders are the same, and some may require other information in addition to what is listed here. However, this is a list of the minimum requirements by virtually all mortgage lenders. By collecting all these documents before your application, you’ll be sure to get through the process more efficiently and allow your lender to provide you with an accurate qualification in time to close on your ideal new home.
Originally published Dec 2, 2019, updated Feb 3, 2022
Photo credits: depositphotos.com
About the Author:
At Sterling Homes, our mission is to provide the opportunity for affordable homeownership without compromise.Over the last 70 years, Sterling Edmonton has quickly become one of Edmonton’s most popular builders. We bring more than seven decades worth of exceptional customer service, superior design and unparalleled craftsmanship to the greater Edmonton area. As a member of the Qualico Group, Sterling Homes focuses on greater Edmonton’s finest family communities, while being able to offer some of the region’s most family friendly prices thanks to volume purchasing power for materials, trades and land.This has not only made Sterling one of Edmonton’s bestselling, move-up builders, but also one of the industry’s most respected home providers. It is through our uncompromising commitment to our customers that we proudly deliver the Sterling Advantage – that’s why each and every home we build includes a 10-year home warranty, a completion guarantee and new home warranty excellence rating. Our Advantage is our pledge that, when you build your dream home with Sterling, we will deliver a timely, well-built home you’re sure to enjoy for years to come.
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